A company has budgeted sales of 20, 000 units in April. An estimated increase in sales of 5,000 units in May and the increase of 10, 000 units based on the month of May sales on June was estimated. July estimated sales is 40,000. The company is preparing a production budget for the quarter. Ending inventory level must equal 20% of the next month’s sales. Required: Prepare a production budget for the quarter by month and in total.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
A company has budgeted sales of 20, 000 units in April. An estimated increase in sales of 5,000 units in May and the increase of 10, 000 units based on the month of May sales on June was estimated. July estimated sales is 40,000. The company is preparing a production budget for the quarter. Ending inventory level must equal 20% of the next month’s sales.
Required: Prepare a production budget for the quarter by month and in total.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
